On April 19, 2024, Rongda Hezhong (Xiamen) Technology Group Co., Ltd. from Fujian Xiamen (hereinafter referred to as "Rongda Hezhong") submitted a prospectus to the Hong Kong Stock Exchange, planning to list on the main board in Hong Kong.

Rongda Hezhong, once considered an A-share listing and hired Sinolink Securities as a listing counseling institution on June 25, 2021. Subsequently, it voluntarily decided not to apply for an A-share listing, did not formally apply for an A-share listing, and terminated the employment of the counseling institution in April 2023.

Rongda Hezhong prospectus link:

https://www1.hkexnews.hk/app/sehk/2024/106406/documents/sehk24041902152_c.pdf

Main Business

Rongda Hezhong, established in 2010, as a supplier of Automatic Identification Data Capture (AIDC) devices and solutions, is engaged in the research and development, design, manufacturing, and marketing of specialized printers, scales, POS terminals, and PDAs. The company's products are sold to over 140 countries, including but not limited to the USA, Malaysia, Spain, France, Argentina, Brazil, the United Arab Emirates, as well as in no less than 30 provinces, municipalities, and autonomous regions in China.

According to Frost & Sullivan data, in 2022, in terms of revenue, Rongda Hezhong is the fourth largest enterprise in the specialized printer market in China, with a market share of 2.5%.

As of April 9, 2024, Rongda Hezhong provides over 100 standard product models, widely used in various industries including but not limited to retail, education, dining, logistics, warehousing, manufacturing, hotels, medical, and environmental sectors. The company's comprehensive products offer an all-in-one AIDC solution, promoting the digital upgrading of customer businesses. For example, the company has developed POS terminals with built-in printing modules, cameras, and NFC readers to meet specific requirements in automation, cost reduction, data management, and transaction management for multiple industries.

In 2022, Raycloud technology co.,ltd. started to manufacture and sell ai-empowered intelligent AI scales equipped with product recognition technology, enabling automatic, real-time, accurate identification and weighing of retail products in supermarkets, and efficiently printing price labels. In 2023, Raycloud technology co.,ltd. expanded its business scope to the medical industry, producing medical wristband label printers. This is an antimicrobial printer equipped with NFC paper-out detection function, which can print high-frequency wireless RFID identification wristbands for patients. In addition, Raycloud technology co.,ltd. developed a hazardous waste label printer in 2023, expanding its influence in the eco-friendly concept industry. This printer can be connected to the national or local hazardous waste disposal platform to print labels with specific hazard signs.

Shareholder Structure

According to the prospectus, Raycloud technology co.,ltd.'s shareholder structure before listing is as follows:

Mr. Xu Kaiming holds 39.77% of the shares;

Mr. Xu Kaihe holds 2.95% of the shares;

Xiamen Rongxin (99% owned by Mr. Xu Kaiming, 1% owned by Mr. Xu Kaihe) holds 47.81% of the shares;

Employee shareholding platform Xiamen Gaoli Zhongcheng (Mr. Xu Kaihe is a general partner) holds 1.33% of the shares;

Employee shareholding platform Xiamen Gaoli Hezhong (Mr. Xu Kaiming is a general partner) holds 1.19% of the shares;

Xu Kaiming, Xu Kaihe brothers hold a total of approximately 93.05% of the above shares, the above shareholders are a group of controlling shareholders.

Mr. Lin Huanan holds 3.29% of the shares;

Mr. Yang Litie holds 1.38% of the shares;

Hangzhou Raycloud Technology (688365.SH) holds 1.07% of the shares;

Jiangsu Zhanbo (Mr. Pan Baogang 98%, Ms. Yuan Lanfang 2%) holds 0.65% of the shares;

Xiamen Chengfeng Junhua, Xiamen Jiayi Junde (two companies with the same shareholders: Mr. Yang Jundu 98%, Mr. Wang Maodan 2%) respectively hold 0.49%, 0.07%;

Board of directors and executives

The board of directors of Rongda Hezhong consists of 6 directors, including 3 executive directors (Mr. Xu Kaiming, Mr. Xu Kaihe, Ms. Lin Yanqin), and 3 independent non-executive directors (Dr. Lin Junhua, Dr. Yu Xiaou, Dr. Huang Liqin).

There are three supervisors in the supervisory board (Ms. Chai Ling, Mr. Jiang Jingtao, Mr. Fu Jianfang).

In addition to the executive director, the senior management includes the board secretary, chief financial officer, deputy general manager, director of the major customer department and joint corporate secretary Mr. Hu Zunfa, Mr. Fu Jianfang, general manager of the weighing department, and Ms. Lin Cheng, head of the international department.

Corporate Performance

Financial data shows that in the past years 2021, 2022, and 2023, Rongdahezhong's revenue was RMB 0.38 billion, 0.393 billion, and 3.49 billion yuan, respectively, with corresponding net profits of RMB 29.276 million, 37.447 million, and 27.603 million yuan, and corresponding adjusted net profits of RMB 33.285 million, 45.605 million, and 36.208 million yuan.

Intermediary Team

The main intermediaries for Rongdahezhong's IPO include Yue Xiu Finance as its exclusive sponsor; PwC as its auditor; Tianheng Union, King & Wood Mallesons (Hong Kong) as its Chinese and Hong Kong legal advisers, Zhong Lun as its brokerage legal adviser; Huifeng Evaluation as its property valuer; and Frost & Sullivan as its industry consultant.